Refer to Figure 11-11. If the firm chooses to produce and sell 25,000 frames per month by operating in the short run with a scale operation represented by ATCc
A) the firm would lower its average costs by reducing its scale of operation.
B) the firm will not be able to earn a profit.
C) the firm will be operating efficiently.
D) the firm will not be operating efficiently.
C
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A collusive agreement between two duopolists is similar to the prisoners' dilemma because in both games
A) the best outcome is always achieved. B) each players strategy depends on what the other player does. C) the Nash equilibrium is not the best outcome for the players. D) All of the above answers are correct.
If a monopoly firm reduced the price of its product, which of following must have been true?
A. MR > MC B. MR < MC C. MR > AR D. MC > AR
The production possibility curve is bowed outward from the origin because of:
a. the law of increasing opportunity costs. b. the finite nature of the resource base. c. inefficiency. d. improper output mix. e. unemployment.
Effective methods of dealing with externalities would include
a. taxing firms that generate beneficial externalities. b. imposing fines equal to the difference between MSC and MPC on firms that generate beneficial externalities. c. giving a subsidy per unit equal to the difference between MSC and MPC to firms that generate beneficial externalities. d. restricting the output of firms that generate beneficial externalities.